Homeowners who owe more on their house than it’s worth face a dilemma. Should I stay or should I go now? Suze Orman tells CBS Sacramento’s Call Kurtis that those folks need to take a hard look at the value of their homes and make a tough decision. “If you own a home that is 50% underwater, 70% underwater, it will never ever, ever come back to where you purchased it.” she said.

Only if your house is more than 20% underwater should you consider it, she says, advocating that people just “do the math.” If the numbers don’t add up, first try to get your bank to modify the loan. If that doesn’t work, try a short sale. If the bank won’t let you do a short sale, send them “jingle mail” – an envelope with the keys to your house and a note saying “take it,” and become renters.

You won’t qualify for a house for a long time after that and your credit cards and other lenders will probably all end up cutting you off. But it will give you the chance to get out from rock bottom, build up savings again, and breath a sigh of relief.

Call Kurtis: Should You Walk Away from Your Underwater Mortgage? [CBS Sacramento]

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